South Korea, Iran discuss resuming oil trade, unfreezing funds

South Korea and Iran have held working-level talks on resuming imports of Iranian crude oil and unfreezing Iranian funds held in the East Asian nation, South Korea’s Foreign Ministry said on Wednesday, Reuters reports.

South Korea was previously one of Iran’s leading Asian oil customers. The move coincides with negotiations resuming in Vienna to revive Tehran’s 2015 nuclear agreement with world powers.

Tehran has repeatedly demanded the release of about $7 billion of its funds frozen in South Korean banks under US sanctions, saying Seoul was holding the money “hostage”.

“Our side expressed hope for the resolution of issues related to sanctions such as the transfer of frozen funds upon the agreement on the restoration of the Joint Comprehensive Plan of Action (JCPOA) now under way in Vienna,” a South Korean statement said, using the full name of the nuclear accord.

READ: Iran rules out ‘interim agreement’ in Vienna nuclear talks

The Iranian side stressed the importance of an early resolution on the matter of the frozen funds, it added.

Iran and South Korea are also discussing the trading of crude oil and oil products, on the condition sanctions are lifted as progress is made in nuclear negotiations, the statement said.

Previously South Korean oil buyers chiefly imported condensate, or an ultra-light form of crude oil, from Iran.

In Tehran, the Iranian Foreign Ministry spokesman, Saeed Khatibzadeh, said Iran saw the talks as a possible indicator of attempts to re-establish trade ties with South Korea.

“This expert meeting’s results can be seen as a test of South Korea’s seriousness to solve existing problems between the two countries and normalising ties, including through oil and condensate sales to Korea and Korean firms’ investments in Iranian projects,” Khatibzadeh told state media.

“Therefore, Iran will carefully follow up on the results of these negotiations in considering how to regulate relations between the two countries,” Khatibzadeh added.

The United States re-imposed sanctions on Iran in 2018 after then President Donald Trump withdrew from the nuclear deal under which Tehran agreed to curb its nuclear programme in exchange for US sanctions relief.

South Korea, the world’s fifth-largest crude buyer, imported a total of 12.6 million tons of crude in January against 10.3 million tons a year ago, preliminary data from the Korea Customs Service showed on Tuesday.

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